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'The best deal we've had'

FARGO -- Minnesota and North Dakota's troika of agricultural policy power predicted Friday the farm bill will go to the House floor next week. They predicted the Senate is in a strong position to override a veto, and that strength is building in ...

FARGO -- Minnesota and North Dakota's troika of agricultural policy power predicted Friday the farm bill will go to the House floor next week.

They predicted the Senate is in a strong position to override a veto, and that strength is building in the House, in case President Bush follows through on a promised veto.

Negotiators have reached a tentative agreement on how to pay for the bill, which would cost almost $300 billion over five years, but still are resolving the policy, including how much would be paid to farmers in a time of record crop prices.

Rep. Collin Peterson, D-Minn., chairman of the House Agriculture Committee, and Rep. Earl Pomeroy, D-N.D., on both the agriculture and Ways and Means Committees, held a joint telephone news conference Friday. Sen. Kent Conrad, D-N.D., a high-ranking agriculture committee member and chairman of the Budget Committee, added remarks in an interview.

Pomeroy said that despite tough negotiations, the bill still would be "the best deal in the farm bill that we've had in a long time -- maybe ever." Conrad said one of the factors for urgency in passing a bill that is "very much on people's minds" is that likely Republican nominee, Sen. John McCain, is very "hostile" toward "any support for production agriculture."

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Here are some key issues of concern to the Red River Valley:

Sugar provisions

Peterson and Pomeroy said they're inclined to stick with sugar provisions in the bill, including a sugar-to-ethanol provision, over White House objections.

New provisions also will "lock in the (marketing) allocation) system so the administration can't monkey with it," Peterson said. The president's staff has told congressional negotiators they didn't like the sugar provisions, but "couldn't tell us" why, he said. Conrad said the administration has given a set of demands, but no priority list. "I would be surprised if (administration) demands are something we think makes sense, but we'll take a look at it."

Peterson said he is hearing that Mexico "expects" and it's their government's "goal" to move 750,000 tons of sugar into the U.S. this year, because of the North American Free Trade Agreement's tariff-free provisions kicking in.

Peterson, however, expects only 200,000 to 300,000 tons to come in, mostly because the Mexican industry is "so screwed up, and their government is so corrupt" that they "can't get their act together."

Peterson said the sugar-to-ethanol provision is needed, however, to deal with bigger Mexican sugar volumes "if it develops."

Sticking points

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Payment limit questions and the national program called Milk Income Loss Contract still are on the table, but should be resolved during the weekend, Peterson said.

"The things that are left are things within our control," Peterson said. He also said he perhaps should have heeded Senate Republicans, who had earlier advised him not to. "I've tried to be respectful of the White House. We will continue to do that."

Peterson said he doesn't like the idea of imposing payment limits on farmers simply based on their size and income. "This is a safety net to undergird production, it's not about us in Washington deciding how big a farm should be," Peterson said.

The bill's negotiators have tried to appease Bush in the past few days, agreeing on stricter limits for those government payments. That agreement would still allow growers who earn up to $950,000 annually in farm income to receive payments, far from the $200,000 annual income cap the Bush administration originally suggested.

Sodsaver

Peterson said "Sodsaver" is a provision that would withhold crop insurance and disaster payment benefits for four years on farmers who have broken up land "that's never been broken." He says the issue is that some farmers are spraying Roundup on some of this land to kill off the grass, and then planting Roundup Ready beans into it. "They're not expecting a crop, but it's because of crop insurance," he said. "They can use the highest (soybean) yield in the county and transfer it to that parcel. They don't plan to make money off farming, but off crop insurance and disaster."

The latest version has been watered-down.

"Now (Sodsaver) is limited to the prairie pothole region, and it's up to a governor to decide whether the state is in or out," Conrad said, a consensus position that he supported.

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"I wanted to make this mandatory," Peterson said, but added, "Now, if the governors want to stop the abuse they can, but most of them are running for cover."

Conrad said he'd heard "a lot of assertions" about abuse, and the need for a Sodsaver-like provision, "especially coming from South Dakota." Conrad said one of the key issues in allowing the loopholes is concern that the U.S. Department of Agriculture would write rules like a "pretzel" so farmers would be unfairly punished, as they were in the old "sodbuster" provisions that withheld benefits for farmers who planted on non-converted wetlands.

What about Ed?

Peterson gave Agriculture Secretary Ed Schafer, a former North Dakota governor, "high marks, given the situation," despite Schafer's leaving Washington on Thursday for New Hampshire. Peterson said Schafer faces "people down at the White House that, in my opinion, have wanted to veto this bill from the start." He said there are about "four different camps" of opposition, including Deputy Secretary Chuck Conner. "The only rational guy I've talked to is Ed Schafer," Peterson said. "He gets it. He knows what needs to be done, but he's not a free agent."

Meatpackers

Farm bill negotiators rejected an attempt to prevent meatpackers from owning cattle more than two weeks before slaughter Thursday, a disappointment for ranchers in the Midwest and Northern Plains who have been pushing for the ban for many years.

Ranchers advocating the change want to ban meatpackers from owning or contracting for cattle more than a week or two before slaughter so large companies can't have control over the cattle for a long period of time and would be forced to pay current market prices for meat.

Supporters of the reform say meatpackers can manipulate the prices they pay for cattle with "captive supplies," or stock they own or control through contracts and marketing agreements. They argue that such control lets meatpackers time their purchases, allowing them to save money but also depress prices.

Large meatpacking companies say they should be to buy cattle whenever they want to.

"We are up against entrenched power, we're up against big money," Sen. Kent Conrad said of the yearslong effort to ban the practice.

The bill does include other priorities for ranchers in the West and Midwest, including language that would require country-of-origin labels on meats and other foods. Northern ranchers have long pushed for such a law, which would help them compete against Canadian ranchers and give consumers more information about where their food is coming from.

The Associated?Press contributed to this report.

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